As mentioned in the end of the previous article Vol.55 – How to Measure Online Influence, engagement, the requirement to make loyal customers, as well as influence, is the key in measurement and success of marketing.
In this article, the author would like to discuss some possible metrics to measure online engagement online that contributes to revenue and business.
She would like to do so three perspectives; loyalty to the website, ROI per web visitor/customer, and acquisition and retention of customers, based on how metrics/KPI are usually set in traditional marketing.
1. Loyalty to the website
1) What is it?
It is how much web users visit website and how they are satisfied and greater the better. This is because loyal web users are engaged and such web users would frequently visit the website and are active web users of the website.
From web management perspective, this can be said that the website is “sticky” and “meeting customer satisfaction”.
2) How can it be measured?
It can be measured by quantity of the web user visits and how long the web user stays in the website per visit (or other online pages such as blogs, SNS etc.).
The quantity of the web visits can be measured by the number of web visits i.e. PV (page view) and the number of web users visited the web site i.e. number of unique users/visitors (an IP address plus a further identifier).
The duration of the web user stays in the website can be measured by the total time an average web visitor stays in the website, which can be broken into the average time by a web visitor spent on one page of the website and the average pages visited by a web visitor.
The average pages visited by a web visitor can be an indicator of how active the web visitor is. This is because usually an active web visitor not only spends long time in the website but also visits many pages to access variety of contents/services.
Website can be paraphrased to blogs, SNS (e.g. Facebook, LinkedIn) microblogging (e.g. Twitter), video portal (e.g. YouTube) and all other online sites as well.
2. Acquisition and retention of customers
1) What is it?
It is how many customers remain as customers (i.e. repeaters) once they have become customers from mere web visitors to “buy” something, i.e. take action as anticipated (planned) by the marketer. This is all about acquisition and retention of customers by maximizing new customers acquired and minimizing attrition of customers.
The greater the retention rate, the greater the ROI because as always said, it costs 5 times as much to acquire new customers than retaining customers.
2) How can it be measured?
If it is of anything of membership and subscription, it can be measured by the number of members and subscribers.
In the case of SNS, such indicators as number of group members/fans would help in the measurement.
If it is a website or a blog, bookmarking, RSS subscription and registration to be a reader also help in the measurement.
However, a web visitor becoming a member or subscriber does not necessarily mean he/she is truly engaged and loyal, bringing value to the website i.e. contributing to generating revenue and growth in business.
For this reason, the third perspective is also required.
3. ROI per web visitor/customer
1) What is it?
It is how much value per web visitor (who becomes to be valuable customer) brings in to the website. This is because it is the engaged loyal web visitors that brings in value and those who bring in monetary value are customers.
Unlike valuation of corporation and brands, valuation of websites is not yet feasible, especially non-EC websites (e.g. corporate website); however, measurement from ROI perspective is critical. It goes without saying that the websites that many customers bring in (monetary) value is of high ROI and web equity of such websites are high.
2) How can it be measured?
Simply put, it can be measured by conversion rate of landing pages. The web visitor would likely to have gone through the persuasion scenario mentioned in the previous article Vol.13 – How is Landing Page Optimization Related to Persuasion Scenario? by the time he/she has arrived at transactional landing page(s).
This clears requirements of engagement and loyalty of web users mentioned in #1. And conversion (web user to “buy”) is the objective of the website. Such buying can be anything from subscription and applying for events/seminar to purchasing online.
And in general the more engaged and loyal the customer is the larger value brought in by the customer meaning the larger the ROI. From marketing perspective, this is fulfilled by up-selling and cross-selling.
In the case of social media (e.g. SNS, blogs, microblogging) it can be measured by the value of information shared. It is difficult to set a numeric metric but what can be said is that such information often helps people online to solve problems or make them enjoy and by reading contents whether the information shared is of value or not can be easily determined.
Website can be paraphrased to blogs, SNS (e.g. Facebook, LinkedIn) microblogging (e.g. Twitter), video portal (e.g. YouTube) and all other online sites as well.
ROI per web visitor/customer is perhaps more severe yet measurable for online sites of “click and click” business model such as EC sites and paid content/service sites than “click and mortar” business model online sites.
4. The author’s final thoughts
Web users access website when they pay attention and get interested in the website and become web visitor. It is often when he/she becomes is satisfied that he/she become active, clicking and visiting multiple pages etc. otherwise he/she would go away just by a click. With appropriate conversation/interaction the satisfaction would likely to increase and he/she is to become engaged and loyal. Such people may well be actively sharing information and commenting as well.
As they go through the “funnel” web visitors become customers, and if loyalty remains he/she would likely to “buy” as well as visit repeatedly, turning to be repeaters. Retention is making such repeated visits and buying and it requires engagement of the customers.
#1 through #3 is measuring such steps, which is all about measuring the requirements to maximize CLV (customer lifetime value). This is the value provided to customers in through their lives. The greater the CLV, the better for both the marketer and the customer; greater ROI for the marketer and greater value provided to the customer therefore of Win-Win relationship.
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